Rupiah, stocks ended flat on Tuesday
JAKARTA (JP): The rupiah remained unchanged on Tuesday, closing at 8,050 against the U.S. dollar in thin trading as a lack of fresh incentives kept most players out of the local market, currency dealers said.
Profit taking on certain blue chip stocks weighed down the stock market, with share prices falling 0.2 percent, stock brokers said.
Currency dealers said that persistent dollar bids by state banks and local private commercial banks put heavy pressure on the rupiah, giving it no opportunity to strengthen against the American dollar.
"It was just another bleak day," said a chief dealer with a joint venture bank, adding that offshore market players, especially from Singapore, were on both the selling and buying sides.
Dealers said the country's state banks, as in previous days, continued to bid on the dollar in an apparent effort to finance the import of certain commodities ahead of the Muslim Idul Fitri holiday and settle offshore obligations.
"On top of that, they are buying dollars in anticipation of the long Idul Fitri holiday," the dealer said, pointing out that total trading volume was less than US$100 million on Tuesday.
Currency dealers said that the rupiah, which opened at 7,950 against the dollar, traded in a very narrow range between 7,950 and 8,050 on Tuesday.
Dealers also attributed the presence of the market's new sweetheart, the euro, for the rupiah's lethargic trading volume. The euro has become a fresh target of speculation for global market players.
The euro closed slightly lower at 1.16 against the dollar on Tuesday, compared to its 1.14 closing the previous day.
Like the rupiah, share prices on the Jakarta Stock Exchange (JSX) fell slightly on Tuesday, with the main price index falling 1.10 points to 436.19 on a total turnover of 262.01 million shares with a total value of Rp 210.66 billion ($26.33 million).
Decliners outdistanced advancers 53 to 29 with 84 stocks unchanged.
Stock brokers said that the absence of positive news in the local market coupled with a general fall in regional equity markets helped drag down market sentiment.
"Certain investors continue to cash in their profits on the gains they made the previous day," Vonny Juwono, an institutional sales broker with Trimegah Securindolestari, said.
Stock analysts said that as the Muslim Idul Fitri holiday approached, business and trading on the local financial market had slowed because most traders and investors were in a holiday mood.
"I think some local investors have been on a long holiday for the Muslim Idul Fitri holiday," an analysts with a local securities firm said.
The country's financial market will be closed from Jan. 16 to Jan. 23, and will resume trading on Jan. 25.
However, several foreign brokerage firms, such as Credit Lyonnais Securities, Indosuez WICarr and Jardine Fleming Nusantara were placing buy orders on Tuesday, with certain blue chip stocks their main targets.
"But the total value of the transactions has sharply declined," Trimegah's Vonny noted.
Securities analysts and brokers said that sentiment in the battered local market would likely remain volatile in the coming days as unresolved problems on the country's political and social fronts would pose an obstacle to foreign investors. (aly)